2000/597/EC, Euratom: Council Decision of 29 September 2000 on the system of the European Communities' own resources
Date: 2000-09-29
Institutions: Council of the European Union
Subjects: Member States' contribution, VAT, financing of the EU budget, gross national product, own resources, provision

L 253/42

EN

Official Journal of the European Communities

7.10.2000

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 29 September 2000

on the system of the European Communities' own resources

(2000/597/EC, Euratom)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 269 thereof,

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 173 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the Court of Auditors (3),

Having regard to the opinion of the Economic and Social
Committee (4),

Whereas:

(1)

(2)

(3)

The European Council meeting in Berlin on 24 and 25
March 1999 concluded, inter alia, that the system of the
Communities' own resources should be equitable, trans-
parent, cost-effective, simple and based on criteria which
best express each Member State's ability to contribute.

The Communities' own resources system must ensure
adequate resources for the orderly development of the
Communities' policies, subject
to the need for strict
budgetary discipline.

It is appropriate that the best quality data be used for the
purposes of the budget of the European Union and the
Communities' own resources. The application of
the
European system of integrated economic accounts (here-
inafter referred to as the ‘ESA 95’) in accordance with

(1) OJ C 274 E, 28.9.1999, p. 39.
(2) Opinion delivered on 17 November 1999 (OJ C 189, 7.7.2000,

p. 79).

(3) OJ C 310, 28.10.1999, p. 1.
(4) OJ C 368, 20.12.1999, p. 16.

(4)

(5)

(6)

(7)

Council Regulation (EC) No 2223/96 (5) will
improve
the quality of measurement of national accounts data.

is appropriate to use the most

It
recent statistical
concepts for the purposes of own resources and accord-
ingly to define gross national product (GNP) as being
equal for these purposes to gross national income (GNI)
as provided by the Commission in application of the
ESA 95 in accordance with Regulation (EC) No 2223/
96.

It is, moreover, appropriate, should modifications to the
ESA 95 result in significant changes in GNI as provided
by the Commission in accordance with Regulation (EC)
the Council decide whether these
No 2223/96,
modifications apply for the purposes of own resources.

that

According to Council Decision 94/728/EC, Euratom of
31 October 1994 on the system of
the European
Communities' own resources (6), the maximum ceiling of
own resources for 1999 was set equal to 1,27 % of the
Communities' GNP at market prices and an overall
ceiling of 1,335 % of the Communities' GNP was set for
appropriations for commitments.

It is appropriate to adapt these ceilings expressed as a
percent of GNP in order to maintain unchanged the
amount of financial resources put at the disposal of the
Communities by establishing a formula for the deter-
mination of the new ceilings,
in relation to GNP as
defined for the present purposes, to be applied after the
entry into force of this Decision.

(5) OJ L 310, 30.11.1996, p. 1. Regulation as amended by Regulation

(EC) No 448/98 (OJ L 58, 27.2.1998, p. 1).

(6) OJ L 293, 12.11.1994, p. 9.

7.10.2000

EN

Official Journal of the European Communities

L 253/43

(8)

(9)

(10)

(11)

(12)

(13)

(14)

It is appropriate that the same method be used in the
future on the occasion of changes in the ESA 95 which
may have effects on the level of GNP.

In order further to continue the process of making
allowance for each Member State's ability to contribute
to the system of own resources and of correcting the
regressive aspects of the current system for the least
prosperous Member States,
the European Council
meeting in Berlin of 24 and 25 March 1999 concluded
that the Union's financing rules would be amended as
follows:

— the maximum rate of call of the VAT resource would
be reduced from 1 % to 0,75 % in 2002 and 2003
and to 0,50 % from 2004 onwards,

— the value added tax base of the Member States would
continue to be restricted to 50 % of their GNP.

The European Council of 24 and 25 March 1999
concluded that it is appropriate to adapt the amount
retained by Member States to cover the costs related to
collection in connection with the so-called traditional
own resources paid to the budget of
the European
Union.

Budgetary imbalances should be corrected in such a way
as not to affect the own resources available for the
Communities' policies and be resolved, to the extent
possible, by means of expenditure policy.

defined

in Decision

in favour of

The European Council of 24 and 25 March 1999
concluded that the manner for calculating the correction
the United
of budgetary imbalances
Kingdom as
88/376/EEC,
Euratom (1) and confirmed by Decision 94/728/EC,
Euratom, should not include the windfall gains resulting
from changes in the financing systems and from future
enlargement. Accordingly, at the time of enlargement,
an adjustment will reduce ‘total Allocated Expenditure’
by an amount equivalent to the annual pre-accession
expenditure in the acceding countries, thereby ensuring
that expenditure which is unabated remains so.

For reasons of clarity, the description of the calculation
of the correction in respect of budgetary imbalances
granted to the United Kingdom has been simplified. This
simplification has no impact on the determination of the
amount of
this correction granted to the United
Kingdom.

The European Council of 24 and 25 March 1999
concluded that the financing of the correction of budg-
the United Kingdom
etary imbalances in favour of
should be modified to allow Austria, Germany,
the
Netherlands and Sweden to see a reduction in their
financing share to 25 % of the normal share.

(15)

The monetary reserve, hereinafter referred to as ‘the
EAGGF monetary reserve’, the reserve for the financing
of the Loan Guarantee Fund and the reserve for emer-

(1) OJ L 185, 15.7.1988, p. 24.

gency aid in non-member countries are covered by
specific provisions.

in the light of all relevant

The Commission should undertake, before 1 January
2006, a general review of the operation of the own
resources system, accompanied, if necessary, by appro-
priate proposals,
factors
including the effects of enlargement on the financing of
the budget of the European Union, the possibility of
modifying the own resources structure by creating new
autonomous own resources and the correction of budg-
etary imbalances granted to the United Kingdom as well
as the granting to Austria, Germany, the Netherlands
and Sweden of the reduction in the financing of the
budgetary imbalances in favour of the United Kingdom.

Provisions must be laid down to cover the changeover
from the system introduced by Decision 94/728/EC,
Euratom to that arising from this Decision.

The European Council of 24 and 25 March 1999
concluded that this Decision should take effect on 1
January 2002,

(16)

(17)

(18)

HAS LAID DOWN THESE PROVISIONS, WHICH IT RECOMMENDS
TO THE MEMBER STATES FOR ADOPTION:

Article 1

The Communities shall be allocated own resources in accord-
ance with the rules laid down in the following Articles in order
to ensure, in accordance with Article 269 of the Treaty estab-
lishing the European Community (hereinafter referred to as the
‘EC Treaty’) and Article 173 of the Treaty establishing the
European Atomic Energy Community (hereinafter referred to as
the ‘Euratom Treaty’), the financing of the budget of the Euro-
pean Union.

The budget of the European Union shall, without prejudice to
other revenue, be financed wholly from the Communities' own
resources.

Article 2

Revenue

1.
resources entered in the budget of the European Union:

following shall

from the

constitute own

(a) levies, premiums, additional or compensatory amounts,
additional amounts or factors and other duties established
or to be established by the institutions of the Communities
in respect of trade with non-member countries within the
framework of the common agricultural policy, and also
contributions and other duties provided for within the
framework of the common organisation of the markets in
sugar;

(b) Common Customs Tariff duties and other duties estab-
lished or to be established by the institutions of
the
Communities in respect of trade with non-member coun-
tries and customs duties on products coming under the
Treaty
Steel
Community;

European Coal

establishing

and

the

L 253/44

EN

Official Journal of the European Communities

7.10.2000

(c) the application of a uniform rate valid for all Member
States to the harmonised VAT assessment bases determined
according to Community rules. The assessment base to be
taken into account for this purpose shall not exceed 50 %
of GNP for each Member State, as defined in paragraph 7;

(d) the application of a rate — to be determined pursuant to
the budgetary procedure in the light of the total of all other
revenue — to the sum of all the Member States' GNPs.

2.
Revenue deriving from any new charges introduced
within the framework of a common policy, in accordance with
the EC Treaty or the Euratom Treaty, provided that the proce-
dure laid down in Article 269 of the EC Treaty or in Article
173 of the Euratom Treaty has been followed, shall also consti-
tute own resources entered in the budget of the European
Union.

3. Member States shall retain, by way of collection costs,
25 % of the amounts referred to in paragraph 1(a) and (b),
which shall be established after 31 December 2000.

The uniform rate referred to in paragraph 1(c) shall corre-

4.
spond to the rate resulting from the difference between:

(a) the maximum rate of call of the VAT resource, which is

fixed at:

0,75 % in 2002 and 2003,

0,50 % from 2004 onwards,

and

(b) a rate (‘frozen rate’) equivalent to the ratio between the
amount of the compensation referred to in Article 4 and
the VAT assessment bases (established in
the sum of
accordance with paragraph (1)(c)) of all Member States,
taking into account the fact that the United Kingdom is
excluded from the financing of its correction and that the
share of Austria, Germany, the Netherlands and Sweden in
the financing of the United Kingdom correction is reduced
to one fourth of its normal value.

The rate fixed under paragraph 1(d) shall apply to the

5.
GNP of each Member State.

6.
If, at the beginning of the financial year, the budget has
not been adopted, the previous uniform VAT rate and rate
applicable to Member States' GNPs, without prejudice to the
provisions adopted in accordance with Article 8(2) as regards
the EAGGF monetary reserve, the reserve for financing the
Loan Guarantee Fund and the reserve for emergency aid in
third countries, shall remain applicable until the entry into
force of the new rates.

7.
For the purposes of applying this Decision, GNP shall
mean GNI for the year at market prices as provided by the
Commission in application of the ESA 95 in accordance with
Regulation (EC) No 2223/96.

in significant
Should modifications to the ESA 95 result
changes in the GNI as provided by the Commission,
the
Council, acting unanimously on a proposal of the Commission

and after consulting the European Parliament, shall decide
whether these modifications shall apply for the purposes of this
Decision.

Article 3

1.
The total amount of own resources assigned to the
Communities to cover appropriations for payments may not
exceed a certain percentage of the total GNPs of the Member
States. This percentage, expressed in two decimal places, will be
calculated by the Commission in December 2001 on the basis
of the following formula:

Maximum own resources =

1,27 % ×

1998 + 1999 + 2000 GNP ESA second edition

1998 + 1999 + 2000 GNP ESA 95

2.
Appropriations for commitments entered in the general
budget of the European Union must follow an orderly progres-
sion resulting in a total amount, which does not exceed a
certain percentage of the total GNPs of the Member States. This
percentage, expressed in two decimal places, shall be calculated
by the Commission in December 2001 on the basis of the
following formula:

Maximum appropriations for commitments =

1,335 % ×

1998 + 1999 + 2000 GNP ESA second edition

1998 + 1999 + 2000 GNP ESA 95

An orderly ratio between appropriations for commitments and
appropriations for payments shall be maintained to guarantee
their compatibility and to enable the ceilings pursuant to para-
graph 1 to be respected in subsequent years.

3.
The Commission shall communicate to the budgetary
authority the new ceilings for own resources before 31
December 2001.

4.
The method described in paragraphs 1 and 2 will be
followed in the case of modifications to the ESA 95 which
result in changes in the level of GNP.

Article 4

The United Kingdom shall be granted a correction in respect of
budgetary imbalances.

This correction shall be established by:

(a) calculating the difference, in the preceding financial year,

between:
— the percentage share of the United Kingdom in the sum

of uncapped VAT assessment bases, and

— the percentage share of the United Kingdom in total

allocated expenditure;

7.10.2000

EN

Official Journal of the European Communities

L 253/45

(b) multiplying the difference thus obtained by total allocated

expenditure;

entered in the last budget finally adopted shall remain applic-
able.

(c) multiplying the result under (b) by 0,66;

(d) subtracting from the result under (c) the effects arising for
the United Kingdom from the changeover to capped VAT
and the payments referred to in Article 2(1)(d), namely the
difference between:

— what the United Kingdom would have had to pay for
the amounts financed by the resources referred to in
Article 2(1)(c) and (d),
if the uniform rate had been
applied to non-capped VAT bases, and

— the payments of

the United Kingdom pursuant

to

Article 2(1)(c) and (d);

(e) from the year 2001 onwards, subtracting from the result
under (d) the net gains of the United Kingdom resulting
from the increase in the percentage of resources referred to
in Article 2(1)(a) and (b) retained by Member States to
cover collection and related costs;

(f) calculating, at the time of each enlargement of the Euro-
pean Union, an adjustment to the result under (e) so as to
reduce the compensation, thereby ensuring that expendi-
ture which is unabated before enlargement remains so after
enlargement. This adjustment shall be made by reducing
total allocated expenditure by an amount equivalent to the
annual pre-accession expenditure in the acceding countries.
All amounts so calculated shall be carried forward to subse-
quent years and shall be adjusted annually by applying the
euro GNP deflator used for the adaptation of the Financial
Perspective.

Article 5

1.
The cost of the correction shall be borne by the other
Member States in accordance with the following arrangements:

The distribution of the cost shall first be calculated by reference
to each Member State's share of the payments referred to in
Article 2(1)(d), the United Kingdom being excluded;
it shall
then be adjusted in such a way as to restrict the financing share
of Austria, Germany,
the Netherlands and Sweden to one
fourth of their normal share resulting from this calculation.

2.
The correction shall be granted to the United Kingdom by
a reduction in its payments resulting from the application of
Article 2(1)(c) and (d). The costs borne by the other Member
States shall be added to their payments resulting from the
application for each Member State of Article 2(1)(c) and (d).

The Commission shall perform the calculations required

3.
for the application of Article 4 and this Article.

If, at the beginning of the financial year, the budget has
4.
not been adopted,
the correction granted to the United
Kingdom and the costs borne by the other Member States as

Article 6

The revenue referred to in Article 2 shall be used without
distinction to finance all expenditure entered in the budget. The
revenue needed to cover in full or in part the EAGGF monetary
reserve, the reserve for the financing of the Loan Guarantee
Fund and the reserve for emergency aid in third countries,
entered in the budget shall not be called up from the Member
States until the reserves are implemented. Provisions for the
operation of those reserves shall be adopted as necessary in
accordance with Article 8(2).

Article 7

Any surplus of the Communities' revenue over total actual
expenditure during a financial year shall be carried over to the
following financial year.

Any surpluses generated by a transfer from EAGGF Guarantee
Section chapters, or surplus from the Guarantee Fund arising
from external measures, transferred to the revenue account in
the budget, shall be regarded as constituting own resources.

Article 8

1.
The Communities' own resources referred to in Article
2(1)(a) and (b) shall be collected by the Member States in
accordance with the national provisions imposed by law, regu-
lation or administrative action, which shall, where appropriate,
be adapted to meet the requirements of Community rules.

The Commission shall examine at regular intervals the national
provisions communicated to it by the Member States, transmit
to the Member States the adjustments it deems necessary in
order to ensure that they comply with Community rules and
report to the budget authority.

Member States shall make the resources provided for in Article
2(1)(a) to (d) available to the Commission.

2. Without prejudice to the auditing of the accounts and to
checks that they are lawful and regular as laid down in Article
248 of the EC Treaty and Article 160C of the Euratom Treaty,
such auditing and checks being mainly concerned with the
reliability and effectiveness of national systems and procedures
for determining the base for own resources accruing from VAT
and GNP and without prejudice to the inspection arrangements
made pursuant to Article 279(c) of the EC Treaty and Article
183 point (c) of the Euratom Treaty, the Council shall, acting
unanimously on a proposal from the Commission and after
consulting the European Parliament, adopt
the provisions
necessary to apply this Decision and to make possible the
inspection of
the making available to the
Commission and payment of the revenue referred to in Articles
2 and 5.

the collection,

L 253/46

EN

Official Journal of the European Communities

7.10.2000

Article 9

The Commission shall undertake, before 1 January 2006, a
general review of the own resources system, accompanied, if
necessary, by appropriate proposals, in the light of all relevant
factors, including the effects of enlargement on the financing of
the budget, the possibility of modifying the structure of the
own resources by creating new autonomous own resources and
the correction of budgetary imbalances granted to the United
Kingdom as well as the granting to Austria, Germany, the
to
Netherlands
Article 5(1).

reduction pursuant

and Sweden of

the

Article 10

1. Member States shall be notified of this Decision by the
Secretary-General of the Council and the Decision shall be
published in the Official Journal of the European Communities.

Member States shall notify the Secretary-General of the Council
without delay of the completion of the procedures for the
adoption of this Decision in accordance with their respective
constitutional requirements.

This Decision shall enter into force on the first day of the
month following receipt of the last of the notifications referred
to in the second subparagraph. It shall take effect on 1 January
2002 except for Article 2(3) and Article 4, which shall take
effect on 1 January 2001.

2. (a) Subject to (b), Decision 94/728/EC, Euratom shall be
repealed as of 1 January 2002. Any references to the
Council Decision of 21 April 1970 on the replacement
of financial contributions from Member States by the

Communities' own resources (1), to Council Decision 85/
257/EEC, Euratom of 7 May 1985 on the Communities'
system of own resources (2), to Decision 88/376/EEC,
Euratom, or to Decision 94/728/EC, Euratom shall be
construed as references to this Decision.

(b) Articles 2, 4 and 5 of Decisions 88/376/EEC, Euratom
and 94/728/EC, Euratom shall continue to apply to the
calculation and adjustment of revenue accruing from the
application of a uniform rate valid for all Member States
to the VAT base determined in a uniform manner and
limited between 50 % to 55 % of the GNP of each
Member State, depending on the relevant year, and to
the calculation of the correction of budgetary imbal-
ances granted to the United Kingdom for the years
1988 to 2000.

(c) For amounts referred to in Article 2(1)(a) and (b) which
should have been made available by the Member States
before 28 February 2001 in accordance with the applic-
able Community rules, Member States shall continue to
retain 10 % of these amounts by way of collection costs.

Done at Brussels, 29 September 2000.

For the Council

The President

L. FABIUS

(1) OJ L 94, 28.4.1970, p. 19.
(2) OJ L 128, 14.5.1985, p. 15. Decision repealed by Decision 88/

376/EEC, Euratom.